An analysis of optimal equilibrium in the carbon trading market - From a tripartite evolutionary game perspective

Abstract

As the climate crisis intensifies, achieving the global consensus of carbon peaking and carbon neutrality has become imperative. Carbon trading is an important financial measure to address the environmental crisis, and the realization of the dual‑carbon goals requires the cooperation and joint efforts of all parties involved in the carbon emissions trading market. This study constructs a dynamic evolutionary game model involving enterprises, government, and financial institutions while considering consumers' influence. By solving for equilibrium points and conducting numerical simulations, we explore optimal strategy choices for each stakeholder. Our findings reveal that the success of enterprise low-carbon transition is contingent upon market dynamics and requires active cooperation from government, financial institutions, and the public. Furthermore, factors such as financial market efficiency and internal governance capacity significantly impact enterprises' transformation decisions by influencing low-carbon transition costs. Public feedback indirectly affects enterprise decisions through its influence on financial institutions' provision of green services. Additionally, gradual reduction of carbon quotas by government entities facilitates progress toward low-carbon transformation objectives.